Hacker News Reader

Comment by gdsdfe | Hacker News Reader

I don't get it, why an analytics company is buying bitcoin ?

Various theories advanced include that it's the company buying Bitcoins from the CEO's private stash, or that their actual software business has gone down the toilet so they're just YOLOing on Bitcoins. Or possibly both.

Founder has been transparent about btc: https://www.microstrategy.com/en/bitcoin.

He is also very transparent about his strategy https://twitter.com/elonmusk/status/1340678358456274948

They seem to be trying to make it sound like airlines doing fuel hedging. That it's only with spare cash, and leveraging some expertise they might have around analytics/data to play the market.

They have explicitly raised new debt to buy bitcoin twice in the past 6 months or so. It certainly isnt "spare cash".

Ah, yes...the exact quote first says "excess cash" then mentions, in a downplayed way, the debt.

"We will continue to pursue our strategy of acquiring bitcoin with excess cash and we may from time to time, subject to market conditions, issue debt or equity securities in capital raising transactions with the objective of using the proceeds to purchase additional bitcoin."

why wouldnt they

Because it's not at all core to their general proposition of providing business intelligence, mobile software, and cloud-based services?

They are a services company, not a speculative investment fund.

Your balance sheet is either cash, which can evaporate overnight due to rampant inflation which many economists are predicting, or you can convert some or all of that to BTC. As a company, you need to manage your cash. Companies invest their balance sheet in debt, money markets, etc. That doesn’t imply that you are somehow a fund. You have no choice but to manage your cash. I recommend just reading Michael Saylor’s posts or listen to this podcast which provides a good summary of their thinking: https://open.spotify.com/episode/1VwUjvMNeoOeyiQwP3im6G?si=z...

The question is why a company doing < $500mm in annual revenue is holding $4B in cash. That's really the only question. It doesn't matter whether it's crypto or real estate or USD. The question is why it's holding so many excess assets at all.

Bitcoin has had a 50% drop two times in the last three years. No matter how bullish you are on its long-term prospects, it can't possibly be seen as a stable store of value in the short term.

At this point they are effectively staked their entire success to BTC. They aren’t just putting cash into BTC they are taking on additional debt to buy BTC.

If you had a strong core business anyway you wouldn’t do this, it’s just a sign that their core business is failing and that pivoting to a Bitcoin investment company is a Hail Mary.

Reply on news.ycombinator.com